Lido Finance activates staking rate limit after more than 150,000 ETH staked

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Liquid staking protocol Lido Finance has enabled a safety feature for the protocol called “staking rate limiting” after over 150,000 Ether (ETH) was staked on the protocol in a single day.

Lido is a digital asset liquid staking solution where users can stake Ether without locking their tokens. When a user deposits her Ether, Lido will issue a liquid variant of ETH known as Stake ETH (stETH), rewarding users with staking rewards for each day the token is held in the wallet.

According to a Feb. 25 tweet from the Liquid Staking Protocol, a “dynamic mechanism” was activated after reaching the staking limit of 150,000 Ether per day.

and Related According to the guide, Lido said the “safety valve” is intended to limit the amount of staked Ether (stETH) that can be minted during high inflows, to address potential negative effects such as reward dilution. I explained that it was intended to

“This means that we can only submit this much ether to Lido’s staking contract within 24 hours,” he explained.

The mechanism works by limiting the amount that can be created based on deposits made within the last 24 hours and replenishing capacity at a rate of 6,200 Ethereum (ETH) per hour.

“This works by reducing the total amount of stETH that can be issued at one time based on recent deposits and replenishing this capacity with each block,” said Lido.

Lido pointed out that the staking rate limiting mechanism will affect “any party that may seek to issue stETH, regardless of approach.”

On-chain analyst Lookonchain at Eagle eyed said: screenshot The 150,100 ETH reportedly came from one user, possibly with three deposits of 50,000 each and one of the 100.

Caption: An on-chain analyst found that 150,100 ETH could have come from a single user.Source: Debank

according to According to the Lido Finance website, as of February 27, more than $8.9 billion in ETH has been wagered on the protocol, up significantly from the $5.8 billion reported on January 2.

Related: SEC crackdown on cryptocurrency staking has uncertain consequences for DeFi: Lido Finance

The latest development from Lido comes as Ether staking volumes reportedly continue to increase as the Shanghai upgrade approaches. The Ethereum Shanghai upgrade or “Ethereum Shanghai fork” is scheduled for his mid-March, leading to speculation about what will happen to the ETH price.

EIP-4895, one of five planned upgrades, is expected to unlock staked ETH and enable withdrawals, potentially increasing liquidity in the cryptocurrency market. I have.

$25 billion in ETH has been staked since the Beacon Chain launched in December 2020, introducing staking into ETH.